The major goals of this proposal are to understand the molecular basis of neuronal and glial differentiation in the developing nervous system. Here, the mechanisms that control sequential motor neuron and oligodendrocyte differentiation from a single progenitor domain (pMN) within the spinal cord will be investigated. GDE2, a six-transmembrane (6-TM) protein that contains an extracellular glycerophosphodiester phosphodiesterase (GDPD) domain is necessary and sufficient to induce motor neuron differentiation through GDPD activity. In this proposal, biochemical and in vivo approaches will be used to define the mechanism of GDE2 GDPD activity and identify potential physiological substrates of 6- TM GDPD enzymatic function. Strikingly, a second 6-TM GDE protein shows complementary expression to GDE2 that is coincident with oligodendrocyte generation. In vivo and in vitro approaches will be taken to test the function of this second GDPD regulatory system in oligodendrocyte specification, differentiation and maturation. Genetic ablation of GDE2 results in increased numbers of oligodendrocytes in the gliogenic period, suggesting that GDE2 might prevent the premature initiation of oligodendrocyte differentiation. This hypothesis will be tested using a combination of biochemical, genetic and functional approaches. Taken together, these studies will provide mechanistic insight into novel GDPD-dependent regulatory systems that control motor neuron and oligodendrocyte differentiation, and determine if they intersect to regulate the temporal control of neurogenesis and gliogenesis in the spinal cord.